Microsoft CEO defends its innovation record, financial results

BELLEVUE, Washington (Reuters) - Microsoft Corp Chief Executive Steve Ballmer defended his company's record on innovation and financial performance at the annual shareholders' meeting, but conceded that he should have moved faster to get into the booming tablet market dominated by Apple Inc's iPad.

Bill Gates, co-founder and now chairman of the world's largest software company, was one of the first to champion tablet-sized devices more than 10 years ago, but Microsoft failed to come up with a product that worked as well as the iPad. Gates was silent throughout the meeting, attended by about 450 shareholders.

"We're innovating on the seam between software and hardware," said Ballmer, asked why his company had fallen behind rival Apple. "Maybe we should have done that earlier."

A month ago, Microsoft launched the Surface tablet - its first own-brand computer - but has not revealed sales figures.

In the tablet market, "we see nothing but a sea of upside," Ballmer said, an acknowledgement that until now Microsoft has effectively had zero presence in the tablet market.

"I feel pretty good about our level of innovation," he added.

Ballmer said smartphones running Microsoft's new Windows software were selling four times as much as they did at this time last year. Microsoft has never given sales numbers of Windows phones, primarily made by Nokia, Samsung and HTC.

Windows currently has 2 to 4 percent of the global smartphone market, according to various independent data providers. Its overall market share will not likely grow in proportion to its own sales, given that sales of other smartphones - mostly running Google's Android system - are also growing quickly.
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